New promises of French legal start-ups

Where there is a friction, there are business opportunities. In France, many start-ups thrive with the promise of easing the pain of documents from unscrupulous administrations or bank users. Examples of such startups include Guacamol for legal documents, PayFit for super-simple payroll or Fred De La Compta for cheap frictionless accounting.

France, as you know, complicates the freedom of action for entrepreneurs, namely because the legal environment (in particular, tax law) is rather vague (or at least perceived by foreign investors as more unstable than many other countries).

Paradoxically, staying in France is an advantage for such start-ups: if you can do it in France, you can do it anywhere. The added value of integrating different steps is greater than for French and international entrepreneurs in France. These companies can make France more attractive and help accelerate the creation of a larger number of enterprises. By helping companies in a complex environment, they set the bar a lot higher for everyone else. They introduce new standards for different professions (in particular, lawyers).

Legal Tech- a new frontier

The legal market has long been a conservative market, traditionally more concerned with perpetuating itself than solving problems for its clients (entrepreneurs). All you need to do is to see that they read some of the many blogs written by lawyers interested in automation and artificial intelligence (these blog posts rarely concern customers' problems). In fact, the model of incomes of law firms - paid hours - is structurally incompatible with the equalization of interests between the bar and its clients. Why do law firms ever want to help create a world in which fewer hours of counsel are required? In other words, the violation will not come from lawyers, but rather from entrepreneurs. Therefore, in the last six years, many new legal tech startups appeared in the US and Europe, which were the subject of a TechCrunch article at the end of 2014: "Legal technology is thriving, and companies are trying to break the legal space at every level and from all sides."

It's not just about automation

The first generation of legal tech start-ups users and software to help law firms automate a certain number of tasks, such as document storage, invoicing or accounting. Basically, these startups are concerned with helping law firms to be more efficient and maximize the number of paid hours their lawyers can charge. The first legal tech startups primarily concern "efficiency", ie, they help to reduce costs, do more with less.

The second generation of legal tech start-ups began to violate the practice of law either by providing customers with direct access to online software to automate tasks, either by circumventing attorneys or by working in the marketplace to match lawyers with clients (the best example of Rocket Lawyer), thereby increasing transparency market and competition, as well as lower prices.

But automation is not an end in itself. In the end, people do not care if they need a service, automated or not, as long as it is smooth, well thought out and cheap enough. Entrepreneurs who want to start their own business want to be able to do it quickly and focus on their projects.

They want legal efforts to be as painless as possible. Therefore, the third generation of legal technological start-ups is the integration of all legal and administrative services into a single service platform that solves all legal and administrative problems of the client (Pravovoz.com). A platform that will integrate all services, such as registration, hiring, patents, intellectual property, and wages, can win.

Administrative pain leads to business opportunities.

Likewise, wages are extremely complex in France and thus not accessible to small and medium-sized businesses without a lawyer specializing in labor law. PayFit has developed software as a service for all SMEs for processing wages without external assistance. No special knowledge is required. All employers must do this, answer a few simple questions, and payment lists are created automatically. Employees will also use PayFit to get an explanation of their payment lists. Soon PayFit is aiming at processing expense reports and payment. The company only collected half a million euros with Kima, a venture company Xavier Niel, which was of great importance in software.

And the last thing,

As entrepreneurship becomes a model of life in France, there is a growing need to simplify processes that remain labyrinthine. France has a good position with these new companies, whose ambition is to immediately turn to the international market, to simplify for foreign start-ups in France and for all companies in other legal conditions in Europe. It is unlikely that the American legal tech startup Clerks will challenge them in Europe. But the French startups could soon challenge them in the US.